South Africa’s competition watchdog found Google guilty of anti-competitive practices, and the tech giant could be forced to pay up to 500 million rand ($27.29 million) annually in compensation to media outlets in the country. Meta and X could also be fined.

According to the preliminary results of a study on market activity published on Monday, Google’s algorithm distorts competition among news media organisations by favouring international news outlets for search and top stories while undervaluing local language and community media.

“This inequity has materially contributed to the erosion of the media in South Africa over the past 14 years and will continue to do so unless remedied,” the watchdog’s report said.

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Google to pay South African media platforms up to 500 million Rand annually 

Google would pay South African news media 300 million to 500 million Rand a year for three to five years, “while putting in place changes to search that will sustainably create shared value with the media through increases in referral traffic,” according to the recommendation.

Later this year, the watchdog will release its final report, and all parties involved have until April 7 to provide supporting documentation.

Google denies the allegation 

Google denied that it has extracted disproportionate value from publishers, although it stated that it will examine the study in depth.

“In 2023, our products like Google Search and News generated an estimated 350 million Rand in referral traffic value for South African publishers while we earned less than 19 million rand from ads displayed next to news queries,” Google said in a statement.

“Alongside this, we have invested in products, training and partnerships to support publishers and the broader news ecosystem, and will continue to do so,” it emphasised.

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Facebook, X cautioned 

Social media companies Meta’s Facebook and X, were advised by the Competition Commission to restore referral traffic to the media and cease “deprioritising South Africa news media posts with links” in the home feed, For You, and Lastestfeed algorithms.

Through increases in revenue share, it hopes to strengthen news media’s capacity to monetise their content on Meta and Google’s YouTube.

A 5–10% digital advertising tax or charge will be applied, the report states, if none of these businesses take these corrective actions within six months of the final report.

The Commission stated that the remedies only apply to these firms’ South African operations.